15 December 2018

Special Focus- Insulation Materials

Building insulation

 

Withstanding climatic adversities / saving energy, reducing carbon dioxide emissions / Going green Volatile energy prices, concern over environmental impact, and occupant health & comfort are driving growth of insulation in India. Though ignored earlier, thermal insulation has gained prudent importance on the wake of stringent energy efficiency norms. As they say, better late than never, the growing awareness among the government and the corporates will pave way for unlimited possibilities for the insulation industry in India.

 

Did you ever realise that about 40 per cent of the energy used in Europe and North America is used by buildings; with heating and cooling representing the biggest energy guzzlers? In Asia also, buildings are one of the biggest energy consumers – using about 30 per cent of the overall energy in Asia. With buildings being such a big energy consumer, here lies a clear opportunity to make them more energy efficient. Good insulation, intelligent building design and efficient appliances actually make it possible to construct buildings with low or even zero energy usage. Zero Energy Office of Malaysia’s Energy Center (PTM) is one of the great examples, highlights a Rockwool report.

 

There are many technologies available today to make buildings more energy efficient, e.g. shading, glazing, lighting system, etc. However, a study done by McKinsey showed that insulation is one of the ‘lowest hanging fruit’ – it is one of the most cost effective measures to save energy and reduce carbon dioxide emissions. With insulation, it is possible to save up to 70 per cent of energy used for cooling.

 

Known for its role in energy saving while controlling the greenhouse gas emissions, it has been gaining immense popularity. By reducing leakages, it helps in managing comfort temperature. On the wake of green technologies & practices, today the potential to save energy by design can be as high as 40-50 per cent.

 

MARKET SEGMENTATION

In terms of insulation type, thermal insulation accounted for the largest market share in 2015, in terms of value and is projected to grow at the highest CAGR in the coming years. This growth is backed by the rising demand of thermal insulation products in the construction sector. As far as materials are concerned, the foamed plastic material segment holds the largest share in this market, in terms of both volume & value. Its sustainable, cost-effective, and recyclable properties have led to such a strong performance among all the insulation materials.

 

Talking about end-users, the market is segmented into commercial construction; residential construction; and industrial, HVAC & OEM equipment. The commercial construction space is expected to register the highest growth rate on the back of massive expanse of industrialisation, urbanisation, and growing movements in automotive & aerospace, etc. Asia-Pacific region is slated to grow at the highest CAGR among all the regions by 2021. This is mainly due to emerging economies in China, Southeast countries, and India; urbanisation, industrialisation, and excellent PEST (Political, Economic, Social, and Technological) conditions, suggest a recent report.

 

Throwing light on the demand trends, Jayant Rajan, GM – India & South Asia, Armacell, informs, “The Indian Insulation market has traditionally considered the conventional insulation material like glass wool/mineral wool/PUF as the solution to insulation needs. With the opening up of economy and entry of global industry practices in the Indian market, the Indian market has started adapting global technologies, which have resulted in many existing products & technologies going obsolete. However, the Indian insulation market is still developing as compared to the global market in some critical areas. For instance, fire regulations form a core building code in the western countries, which is often overlooked in the current Indian building practices. With the recent government initiatives in place, the Indian market is looking to expand its outlook towards modern insulation practices and solutions, at which Armacell has been at forefront since past many years.”

 

DEMAND DRIVERS

Insulation products help in reducing the temperature flow in living spaces and help increase the comfort level in offices/living spaces. However, the lack of awareness of insulation products poses as a potential restraint in the insulation products market. Since many construction sites are built without considering the lucrative side of the insulation products.

 

The introduction of various policy and regulations supporting the demand of insulation in residential and commercial building are some of the factors bolstering the building insulation market demand worldwide. The growth of real estate sector is also identified as key driver for the market. This is majorly supported by continuously migration from rural to urban centres. This scenario is reinforcing housing construction in urban regions, thus presenting huge demand for insulation materials. According to Rajan, increasing awareness about energy conservation, rapid urbanisation, growth in healthcare & hospitality are some of the key drivers for growth of insulation market in India.”

 

The emerging trends, which have a direct impact on the dynamics of the industry, include shift towards greener insulation alternatives and increasing demand for high-temperature thermal insulation. Of the major insulation types, the foamed plastic segment will post the fastest gains in demand. Foamed plastic insulation will be used more frequently in construction applications because of its high insulation values, allowing it to capture market share from fiberglass and mineral wool insulation, highlight a recent report.

 

HVAC POSSIBILITIES

Asia-Pacific is currently the largest market for HVAC insulation with tremendous demand from China, India, and Indonesia on the back of burgeoning growth in construction activities. Added to it, increasing awareness towards reducing energy consumption in buildings and imposition of stringent regulations to enhance energy efficiency of buildings in major countries such as Australia, Japan, and China are driving the market. Among the many materials, glass wool HVAC insulation accounted for the largest-market share due to its easy availability, low cost, and wide application areas. Phenolic foam is the fastest-growing type of HVAC insulation due to its excellent properties, such as low thermal conductivity, exceptionally low flammability, lightweight, and easy to transport, handle, and install.

 

Elaborating on the importance of HVAC in insulation, Atul Khanna, Senior General Manager, The Supreme Industries Ltd, highlights, “Indian Insulation market is witnessing a healthy growth due to increase in demands of HVAC industry. Earlier air conditioning & refrigeration was considered as luxury products, with limited high-end usage.

 

However, with the opening of economy & global exposure, it is now considered as a necessity. We feel that the demands for HVAC products & the need for insulation products will be very high due to the upcoming 100 New Smart city projects announced by the government. The infrastructural boost proposed in new airports, ports & hospitals, green building projects will surely enhance opportunities in next 3-5 years.”

 

Though the HVAC insulation market is growing at a significant rate, the lack of energy efficiency awareness among consumers and building professionals in developing and undeveloped countries hampers the market growth. Like other industries, availability of skilled labour poses challenges in delivering efficient results. An industry-academia connect can be the best possible solution to this growing void.

 

GROWING EXPANSE

Bullish about the potential prospects, analysts report that the future of the building thermal insulation market looks good with opportunities in the residential and non-residential segments. The global building thermal insulation market is expected to reach an estimated $31.8 billion by 2021 with a CAGR of 4.6 per cent from 2016 to 2021. The major drivers of growth for this market are stringent government regulations on the reduction of greenhouse gas emission and to increase energy efficiency.

 

According to Research & Markets, global insulation materials industry is poised for growth due to the rising demand of efficient insulation in both residential sector on account of the increase in energy costs and tightening governmental policies. The importance of energy conservation is also expected to drive the insulation market. Over the last few years, various government initiatives have been put in to place to reduce greenhouse gas emissions and thus promote energy efficiency, thereby, boosting the insulation market. Additionally, efficient materials are also being used to provide sound & vibration insulation.

 

Within the building thermal insulation market, residential is expected to remain as the largest market by value and volume. Growth in housing demand and increasing awareness towards energy efficiency which would spur growth for this segment over the forecast period. Europe is expected to remain as the largest market due to the stringent government regulations to lower energy consumption and reduction in greenhouse gas emissions. Asia Pacific is expected to witness good growth over the forecast period because of increasing awareness related to energy efficiency and growth in housing demand.

 

Markets and Markets projects that the insulation products market will grow from $43.85 Billion in 2016 to $62.84 Billion by 2021, at an estimated CAGR of 7.46 per cent. The market for Insulation products is growing due to growth in end-use industries such as construction, aerospace & defense, automotive, and HVAC among others. Along with the same, the rise in demand for sustainable & recyclable insulating material has fuelled the market for insulation products. Emerging economies such as India, South Africa, Brazil, and oil-centric GCC (Gulf Cooperation Countries) possess a great potential for the insulation products market.

 

With all these planned developmental activities, we are sure to witness a bright future for insulation industry, thereby giving rise to cleaner & greener abode.




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